A post on the Team
Fortress 2 Website by Valve's Robin Walker offers further explanation of the
changes made to Sticky Bombs in yesterday's Team Fortress 2 patch.
The explanation entails how damage is calculated and the complications of the
Sticky Bomb code (complete with a graph for board meeting fans), and why they
feel balance is now better served: "Why did we do this? We didn't think that the
Demoman was overpowered at medium & long ranges, where the charge up time
provides an existing penalty. If we did a straight damage reduction across the
board, we would affect that. In addition, by weakening the Demoman specifically
at short range, we've created a weakness that enemies can take advantage of in
combat, and makes the Demoman wary of specific enemy classes (like the Scout and
Pyro)."

IMO they went overboard. Now the only viable counter to a charging demo or scout is the nade launcher, which has a much higher learning curve (and skill ceiling). A noob W+M1 pyro can easily kill even an average pub demo, which doesn't seem very balanced to me.